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MoneyWeek’s report illustrates the gap between an IPO offer price and the price investors may pay after trading begins. In its SpaceX example, an investor who bought at $135 in June was roughly breaking even by the end of October, while one who bought at $160.95 after the first day’s trading was about 16% down, in dollar terms.
MoneyWeek’s report compares two investors who bought SpaceX shares at different points: one at the reported $135 IPO price in June and another at $160.95 after the first day of trading. By the end of October, the first investor was roughly breaking even in dollar terms, while the second was about 16% down, according to the report.
The example shows how an IPO’s offer price and its price once public trading begins can differ. The investor who secured shares at the June offer price paid $25.95 less per share than the investor who bought at the end of the first trading day. MoneyWeek says the later buyer’s position was about 16% lower by the end of October, while the earlier buyer was roughly at break-even.
The report presents the figures as an illustration of the difficulty investors can face when trying to buy a popular offering at its IPO price. It does not provide details in the supplied material about how many shares either investor bought, whether fees or taxes were included, or the exact calculation behind the percentage loss. The performance figures are historical observations through October, not a forecast or a promise about future returns.
The comparison concerns the difference between receiving shares in an offering and buying them after trading starts. Investors who do not receive an IPO allocation may enter at a higher market price. The example also reports that the $135 buyer was roughly at break-even by October.
The Cost of Missing an IPO Allocation
The example concerns the difference between an IPO offer price and the price available after shares begin public trading. Access to an offering can be limited, and buyers who purchase later may face a price shaped by market demand. In this case, the reported gap between $135 and $160.95 coincided with different results by October.
The comparison distinguishes the IPO price from the price paid in the market. It reports outcomes over a period ending in October, but does not establish how either price point would affect returns over a different period.
The example involves one company and two purchase points; it does not establish how IPOs generally perform. It shows that entry prices can affect the reported return for investors holding shares in the same company.
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Offer Price Versus First-Day Trading
An IPO is a company’s initial sale of shares to public investors. The offer price is set before public trading begins, while the market price can move once trading starts. An investor who receives shares at the offer price and an investor who buys later may therefore own the same stock at substantially different cost bases.
MoneyWeek frames its comparison around a reported SpaceX offering in June and the close of the first day’s trading. The supplied report says the IPO price was $135 and the later purchase price was $160.95. It then compares both positions at the end of October in dollar terms. The source material does not specify the calendar year, and this article does not infer one.
The report’s headline describes “the best deals” as hard to buy into, but the supplied figures support a narrower conclusion: these two buyers had different outcomes because they entered at different prices. The material does not provide allocation data, broader IPO performance statistics, or evidence that this price pattern applies to other offerings.
““Same company, same shares, one day’s trading apart.””
— MoneyWeek report
Limits of the SpaceX Comparison
The supplied material does not state the year of the June offering or the October measurement date. It also does not explain whether the reported outcomes include trading costs, taxes, dividends, or currency effects beyond being described as dollar-denominated. The calculation behind “about 16% down” is not detailed.
It is also unclear from the excerpt how many investors received shares at the IPO price, what allocation process applied, or whether the two purchases are actual transactions or illustrative investor scenarios. The example cannot establish how accessible the offering was or how typical the difference is across IPOs. No later share-price information is supplied.
What Investors Should Watch
The figures in the report are historical through the end of October; the supplied source gives no subsequent performance update or company announcement to report. Readers seeking the current value of the shares would need up-to-date market data, which is not included in the material here.
For future IPOs, relevant details include the offer price, who is eligible to receive an allocation, when public trading begins, and the price at which shares can be bought. Comparing returns also requires a clear purchase date and measurement date, as well as information about relevant costs. These details help clarify whether a comparison uses the same basis for each buyer.
Key Questions
What price did the two SpaceX investors pay?
According to MoneyWeek, one bought at the $135 IPO price in June. The other bought at $160.95 at the end of the first day of trading.
How did the two positions compare by October?
The report says the IPO-price buyer was roughly breaking even by the end of October, in dollar terms. It says the later buyer was about 16% down.
Does this example show that IPOs are usually poor investments?
No. The supplied material gives one comparison involving two purchase prices; it does not provide data showing how IPOs perform as a group.
Some investors may buy through an IPO allocation at the offer price, while others may purchase after public trading begins, when the market price can differ. The source excerpt does not describe the allocation rules for this example.
Are the reported returns a prediction of future performance?
No. They are historical figures reported through the end of October. They do not guarantee future returns, and the supplied material does not include updated performance data.
Source: moneyweek.com
